It was fascinating to thoroughly read a new analysis from the
Commonwealth Fund, which, as this publication reported recently,
examined the results of a Commonwealth Fund-supported study published in
the October issue of Health Affairs and authored by researchers from
Harvard University, the University of California-Berkeley, Dartmouth
College, and elsewhere, which looked at data from national surveys of
399 accountable care organizations (ACOs), examining differences between
the 228 commercial ACOs studied, and the 171 non-commercial (Medicare or
Medicaid) ACOs studied.

The Commonwealth Fund analysis, by David Peiris, Madeleine
Phipps-Taylor, Stephen M. Shortell, Valerie Lewis, Merdeith B.
Rosenthal, Carrie H. Colla, Courtney A. Stachowski, and Lee-Sien Kao,
and written by Brian Schilling, began with a synopsis that reads,
"Online survey data show that accountable care organizations (ACOs)
with commercial contracts outperform ACOs with public-payer contracts on
selected measures of quality and process efficiency. These differences
in performance are linked to variation in organizational structure,
provider compensation, quality improvement activities, and management
systems. The public sector can and should play a lead role in supporting
and guiding the future growth of ACOs to ensure that desired quality and
efficiency gains are realized."

As the Commonwealth Fund analysis authors note, "The past four
years have seen rapid growth in the number of ACOs, as various groups
rush to promote or adapt to this new, risk-based payment model. Today,
more than 800 ACOs cover an estimated 28 million Americans, a figure
that some expect to quadruple over the next five years. While large,
more mature commercial ACOs tend to score higher on quality measures and
have more processes in place to improve efficiency than their
noncommercial counterparts do, few ACOs of any variety report having
rigorous quality monitoring processes or substantial financial
incentives tied to quality. To ensure the rapid embrace of this
promising model leads to desired improvements in healthcare quality and
efficiency," the analysis's authors state, "ACO leaders
and policymakers will need to focus on critical success factors such as
organizational structure, health IT, physician engagement and
incentives, and quality improvement."

Now for a few fascinating drill-down results:

* Commercial ACOs are far more likely--41 percent versus 19
percent--to include one or more hospitals, and to be jointly led by
physicians and hospitals (60 percent versus 47 percent). Commercial ACOs
also had lower expenses per Medicare enrollee--$10,000 versus
$12,000--and slightly higher overall quality-of-care scores.

* Commercial ACOs tended to be more active in tying physician
compensation to quality incentives, though overall, only half of ACOs
reported even monitoring financial performance at the physician level.
Commercial ACOs were also more likely to tie specialists'
compensation to quality metrics.

* Overall, quality improvement activities were seen by the analysts
as being modest across the board. Even among the commercial cohort, only
60 percent of those ACOs provide clinical-level performance feedback or
use patient satisfaction data for quality improvement, while only 30
percent reported having well-established chronic care programs.

* When it comes to IT, analysts found that just over 30 percent of
commercial ACOs use a single electronic health record (EHR) system,
while fewer than 20 percent of non-commercial ACOs do so. And few ACOs
of either type reported "being able to effectively integrate
patient information between providers."

As the Commonwealth Fund-supported analysis noted, "Both
noncommercial and commercial ACOs need to make major investments in
critical infrastructure if they are to support delivery system reform,
the study's authors say. "In particular, this would entail
coordinating quality improvement activities and related financial
incentives for physicians. At the same time," they add, the Health
Affairs article noted that "the immature state of most ACOs'
information technology platforms may substantially complicate such
efforts."

So what can we take from all of this? A number of things. To begin
with, it's interesting that the researchers who have done the
analysis for the Commonwealth Fund found that, while all ACOs have a
long way to go in terms of broad elements such as tying physician
performance to clinical and financial outcomes, providing physicians
with clinical outcomes feedback, providing physicians with financial
outcomes feedback, or creating unified clinical information systems
(including EHRs) across their networks, they also found that commercial
ACOs were ahead of publicly sponsored ACOs in some of these areas.

There are a number of possible explanations for such findings,
including the fact that some commercial ACOs have been in existence
considerably longer than some of the Medicare ACOs; the fact that the
executives of private health plans have far more flexibility to develop
the parameters of their risk-based contracts with providers; and the
fact that some of the same providers now joining the various Medicare
ACOs, including the Medicare Shared Savings Program, the Pioneer ACO
Program, and the Next-Generation ACO Program, already had experience on
the commercial side, and that those that did have that experience, are
benefiting from it now, as they participate in the more rigidly
architected Medicare programs.

Another very interesting finding was the divergence between the
number of ACOs that included both hospitals and physicians, and
especially whose governance included both physician and hospital
leaders--on the private contracting side versus the government
contracting side. The very fact of joint governance, with leadership
from both physician group and hospital system leaders--is an obvious
potential success factor in an ACO's operations, given that
reducing inpatient readmissions and ED visits through population
health-based strategies is essential to bringing down costs and
improving patient outcomes under accountable care. And that 60-47
percent disparity around governance speaks to some of the challenges
that some ACOs will face going forward. That having been said, I found
in my research for our September cover story on physicians taking on
risk, that it isn't all black-and-white when it comes to such
things.

For example, Jeffrey LeBenger, M.D., the chairman and CEO of the
Summit Medical Group, based in the northeast New Jersey community of
Berkeley Heights, is leading an entirely physician-run and
physician-governed medical group that is involved in very successful
risk contracting with private payers in New Jersey. But Dr. LeBenger and
his colleagues also know that smart strategy and governance go hand in
hand, and that it is those elements that must drive the leveraging of
technology. As he put it to me, "Infrastructure does not drive
medical care. You have to have the physician buy-in and the program that
manages patient care, and your infrastructure has to support the care,
but not drive it." And, finally, he says this about why physician
group leaders can in some cases achieve what hospital and health system
leaders struggle to achieve: "Often, when hospitals manage medical
groups, the problem is that they use the wrong paradigm. Our paradigm is
to take everything to the ambulatory sector, and do what's right
for the patient on the ambulatory side."

And that is a perfect segue to the Commonwealth Fund-affiliated
researchers' conclusions about information technology. Because
while it is absolutely clear that improving EHRs and other clinical
information systems, and making them more interoperable and more
responsive to ACO-driven needs, including health information
exchange-related needs (such as the need to alert primary care
physicians of inpatient admissions and discharges and ED visits), all of
those advances need to be strategically driven in order to maximize the
opportunities offered by the present moment in ACO evolution.

But the core points made by the Commonwealth Fund do seem highly
valid to me, particularly given the greater flexibility that private
plan-contracted ACO development offers to physician groups and
hospitals. And that reinforces a core point I make often these days: now
is a wonderful moment for healthcare organization leaders to learn from
one another. We're still in the very early stages of creating true
accountable care in healthcare, and the leaders of pioneering
organizations can share and are sharing tremendous learnings with one
another. And some of those will definitely be around the strategic
architecting and deployment of key clinical information systems,
financial systems, data analytics, and data and information sharing, to
support accountable care- and population health-based initiatives. So I
would take this analysis as a "glass-half-full" kind of
situation, and examine its findings, for all the opportunities it can
provide the countless ACO and population health efforts being developed
right now--and in the near future.

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